Unleashing the Power of High-Yield Dividend Stocks
High-yield dividend stocks have long been a staple of dividend investing, offering investors a tantalizing promise of significant income. While focusing on high-yield stocks comes with risks and caveats, many investors have achieved impressive results by investing in these stocks.
A Real-Life Example of High-Yield Success
Recently, a dividend investor shared his remarkable portfolio and income report on Reddit, revealing that he collects around $1,000 monthly with a relatively modest investment of $40,000. This translates to an astonishing yield of approximately 34%! But what makes this portfolio so remarkable, and what are the key holdings that drive its impressive performance?
Diving into the Portfolio
The investor’s hyper-dividend portfolio is comprised of several high-yield ETFs, including the YieldMax MSTR Option Income Strategy ETF (NYSE:MSTY), which generates income by selling call options on MicroStrategy (MSTR) stock, boasting a distribution rate of around 75%. Another notable holding is the Simplify Volatility Premium ETF (NYSE:SVOL), which yields 16% and has gained popularity on Reddit. This ETF generates income by shorting the CBOE Volatility Index (VIX) and betting on stable or decreasing volatility.
Other Key Holdings
The portfolio also includes the Pacer Pacific Asset Floating Rate High Income ETF (NYSE:FLRT), which yields around 8% and invests primarily in floating-rate loans of non-investment-grade companies. The JPMorgan Equity Premium Income ETF (NYSE:JEPI) is another significant holding, which makes money by investing in large-cap U.S. stocks and selling call options. JEPI is ideal for those seeking exposure to defensive stocks.
More High-Yield Options
Other high-yield ETFs in the portfolio include the YieldMax AMZN Option Income Strategy ETF (NYSE:AMZY), which generates income by selling call options on Amazon, and the YieldMax TSLA Option Income Strategy ETF (NYSE:TSLY), which yields over 120% and sells call options on Tesla shares. Realty Income Corp (NYSE:O), a REIT with a dividend yield of over 5%, is also a staple in the portfolio.
Investing in Private Credit
While high-yield dividend stocks can provide impressive income, investing in private credit can offer even more attractive opportunities. With as little as $100, you can start investing in private credit and potentially outperform publicly-traded REITs.
A Billion-Dollar Investment Strategy
If you’re looking to diversify your portfolio and tap into the next big real estate boom, consider investing in Fundrise, a billion-dollar investment strategy with minimums as low as $10. Carefully review the investment objectives, risks, charges, and expenses of the Fundrise Flagship Fund before investing.
Getting Started
Whether you’re a seasoned investor or just starting out, it’s essential to carefully consider your investment objectives, risks, and strategies. Speak to a financial advisor today to explore your options and create a personalized investment plan tailored to your goals.
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